More Freight, Higher Rates Concern Trucking Management
After a winter season that the trucking industry now far remembers, the trucking economy is stronger then ever. Trucking executives are encouraged by a stronger economy that continues to show growth in the coming months. But fears are beginning to mount and some of the industry’s top executives are increasingly optimistic about their outlook for the new year, both in terms of freight demand and their ability to raise rates,
Truckload carriers surveyed by Transport Capital Partners have expected freight volumes to grow for eight straight quarters, and that confidence continued to build as U.S. gross domestic product growth hit 3.9 percent in the third quarter and freight demand stayed high. As the U.S. economy follows suit, 2015 is expected to be one of the strongest years in the past decade.
“While still off its peak of 92 percent in February 2011,” before the U.S. recovery entered a “slow patch” that lasted until mid-2013, “carrier confidence that volumes will increase over the following 12 months has risen in the last two years, from a low of 45 percent to 76 percent today,” said TCP partners Richard Mikes and Lana Batts.
What’s more, 86 percent of the carriers surveyed in the fourth quarter expected rates to rise over the next 12 months, continuing a trend that started in November 2012, TCP said. Even with diesel prices at 4 year lows, expect trucking services to be higher in 2015.
This time, you won’t get much argument from shippers. The overwhelming majority of shippers surveyed by RBC Capital markets expect North American truck pricing to rise up to 6 percent next year. A year ago, most of the shippers RBC surveyed thought rates would be flat or rise only 3 percent, at most in 2014. Economy growth has changed that.
2015 could be one of the best years since the turn of the century. With GDP expanding more than 3.5 percent in four of the past five quarters, 2015 may feel more like 2004-2005 than any year since, in terms of U.S. freight demand.
Source: Transport Capital Partners